G20 Countries Resist Protectionism
Wednesday, March 10, 2010
The Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO) and the United Nation's Conference on Trade and
Development (UNCTAD) have reiterated their calls on leaders of the G20 countries to resist
protectionism or the prospects for economic recovery may be wiped out.
In their second combined report on G20 Trade and Investment Measures, the three
organizations found that most G20 members are holding to their commitments to
open trade and investment in the wake of the global economic crisis. However,
they say protectionist pressures may continue to gather force in the face of
job losses and high unemployment.
The OECD, co-author with UNCTAD of the report’s chapter on investment,
says there was no open discrimination against foreign investors in the six months
to mid-February 2010, but warns that discretion in the application of the many
state support and rescue programmes for troubled firms may be used to favour
domestic companies and disguise protectionism.
The report cautions that the holdings acquired by governments as a response
to the crisis may jeopardize governments’ impartiality in policy making
and law enforcement. Government ownership and rescue of firms may also distort
and protract restructuring of economic sectors, the report notes. Lastly the
report lauds recent G20 investment measures that have continued to point towards
greater openness and clarity for foreign investors.
OECD Secretary-General, Angel Gurría, said: “Openness to international
investment is a precondition for strong global economy, job creation, and innovation.
The OECD will continue to monitor investment policy developments closely.”
The leaders of the G20, which comprises the world’s largest economies,
committed to resist protectionism and promote global trade and investment at
summits in November 2008, in April 2009 and again in September 2009. They mandated
WTO, OECD and UNCTAD – the leading international organizations in the
area of international trade and investment policies – to monitor policy
developments and report publicly on these commitments.
This second report to G20 leaders covers measures taken or announced by G20
members between September 2009 and mid-February 2010. The previous report was
issued ahead of the G20 Summit in Pittsburgh in September 2009.